Tag Archives: prices

FFFA! Sales, prices, rents and resources.

It’s that time of the week again…

Friday Free-for-all time!

This is our regular end of the week news roundup and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:

GV: sales up, prices slip
PTT a ‘drag’ on RE economy
What are you paying for rent?
Vacant homes target by thieves
TD forecasts dip in Calgary
but they’re already down YOY

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

Where Canadian house prices are up or down

The latest data from the Canadian Real Estate Association is now showing about half of the countries markets with rising and half with dropping prices.

Toronto and Vancouver are doing well so far with a year over year increase of 4.9% and 1.8% .

The big winner? That would be St. Catharines with a YOY increase of 16.1%.

The overall average house price grew 3.1 per cent in the year to January, to $401,143. That’s the smallest increase since April, 2013, but it’s largely a story of two still-hot housing markets: Toronto and Vancouver. Strip out those two cities and average house prices are down 0.3 per cent over the past year.

Home sales, meanwhile, are 2 per cent lower than they were a year ago, CREA numbers showed.

Major energy industry centres like Calgary, Edmonton, Saskatoon and Regina saw some of the sharpest declines in housing demand, TD economist Diana Petramala noted.

There is “a widening regional wedge” in Canada’s housing markets, Petramala wrote in a client note, as oil-importing cities’ housing markets benefit from lower oil prices while producer cities struggle.

Read the full article here.

Oil Prices drive Shell to cut Canadian Jobs

Shell is cutting hundreds of jobs in Alberta as oil price drops change everything.

Already, some companies have put longer-term oil sands projects on hold until markets stabilize, which analysts say may not start to happen until at least midway through 2015. And service industries that support the sector have cut jobs as business has slowed.

Northern Alberta’s oil sands have among the highest development costs in global energy, so operations are particularly vulnerable to skidding crude prices. North American benchmark West Texas Intermediate crude fell 43 cents to $48.36 a barrel on Friday, down from more than $100 in June.

Shell said it is laying off less than 10 per cent of the 3,000 workers at the Albian Sands project, one of five major oil sands mining ventures.

A spokesman for the company declined to give exact job-loss numbers, but a labour official in Fort McMurray, who does not represent Shell workers, pegged them at around 200.

Read the full article here.

How to prepare for interest rate hikes.

We should be well and deep into the ‘boy who cried wolf’ territory by now.

How long have you heard warnings that interest rates may be going up?

We’ve all become so used to hearing that it’s going to be a big surprise if they do.

The CBC has an article that says interest rates will go up this year and here are 4 ways Canadians should prepare.

#3 is ‘don’t rush to buy a home’:

Higher interest rates could also lead to a correction in the housing market.

“The big issue as far as I can see is that people panic and think they have to get into the housing market before interest rates climb. But they have to recognize the overall long-term impact of interest rates actually climbing,” says Laurie Campbell, CEO of Credit Canada Debt Solutions.

Homebuyers who rush out to purchase homes to beat a spike in rates could end up with homes dropping in value.

“I think people have to be vigilant about any big purchases they may be making in the next little while. Housing in particular,” Heath says. “If someone is considering purchasing a house, they have to really look at more normal interest rates during their budgeting.”

Read the full article here.

As oil, so goes Real Estate?

Over at the CBC Don Pittis notes that what goes up can also go down.

Specifically, he notes that in the oil market there were a number of ‘experts’ with access to detailed data and analysis, yet seemed to be as surprised as anyone at the drop in oil prices.

Canadas housing market is of course a completely different beast, and we don’t really lack for ‘experts’ noting that prices are a bit out of sync with reality.  When the Finance Minister speaks up and the Bank of Canada estimates that real estate is as much as 30% overpriced nationwide that’s not exactly ‘without warning’.

Pittis notes another key difference between oil and housing is of course the liquidity of the market:

This is one example of how housing is different from oil. While oil trades on big, well-informed central trading desks by large corporations, housing is a market made of individual, many of whom have only bought and sold a house once in their life.

Partly because of that, housing is an illiquid market. Unlike stocks or oil, you can’t just sell a house at today’s price and get out. You have to go through the long process of finding another individual who wants to buy your exact house at a price at which you are willing to sell.

In previous housing downturns that has meant a stock of overpriced houses builds up because buyers are unwilling to pay the price sellers expect.

At that point, prices in the market are set by people who have to sell immediately and will take the price offered. Sudden divorces. A new job across the country. A death in family. People who can’t afford to keep up their payments. Overpriced properties waiting for their price actually fall in value while the seller waits.

Read the full article here.